Fed Chair Resists Calls to Resign Amid Political Firestorm
Federal Reserve Chair Jerome Powell has made it clear to allies that he will not step down under pressure from President Donald Trump, even as the White House intensifies its campaign to force rate cuts. Powell believes that resigning would damage the central bank’s independence and set a dangerous precedent for political interference in monetary policy.
Trump has repeatedly attacked Powell for resisting demands to lower interest rates, accusing him of trying to hurt the administration. Despite harsh public insults and internal speculation about his resignation, Powell insists on serving through May 2026. Behind closed doors, he has argued that defending the Fed’s autonomy is more important now than ever.
Mounting Political Tension Over Rates and Renovations
The conflict has escalated in recent weeks, with Trump launching personal attacks and highlighting the cost of the Fed’s $2.5 billion headquarters renovation. The president toured the facility Thursday alongside Powell, using the opportunity to publicly advocate for rate cuts. While the encounter ended on a conciliatory note, tensions remain high.
Critics of the administration’s pressure campaign warn that politicizing interest rate decisions could spook financial markets. Still, Trump and his aides are reportedly using the renovation project as a lever to increase public scrutiny, arguing that the funds could have been better used to help struggling Americans facing high borrowing costs.
Powell Remains Focused on Monetary Policy
Despite mounting criticism, Powell has remained focused on the Fed’s primary mission — managing inflation and supporting economic stability. He has avoided engaging in political debates and continues to rely on economic data to guide decisions. The Fed is expected to hold rates steady at its next meeting, delaying any policy shifts until the fall.
Economic analysts say Powell’s strategy is rooted in preserving institutional credibility. “The best defense for the Fed is to get the policy right,” said Yale economist Bill English. Powell’s refusal to bend under pressure has earned him praise from both Democrats and Republicans who fear the long-term consequences of political manipulation.
Support Grows for Powell Across Party Lines
While some Democrats were previously critical of Powell’s hawkish stance on inflation during the Biden administration, many have now voiced strong support for his refusal to resign. Former officials commend his commitment to the Fed’s integrity despite intense political pressure. Republican lawmakers have also expressed concern about the credibility risk posed by Trump’s attacks.
With Trump fixated on rate cuts ahead of the midterms, Powell’s continued resistance is shaping up as a defining test of the Fed’s independence. As one Trump adviser put it, the strategy is simple: apply constant pressure until Powell either “leaps or boils.” So far, he shows no sign of leaping.
